Global IP Matrix - Issue 8

In ITV v. TVCatchcup, v TVCatchup provides
a service in the E.U that permits its users to
receive ‘live streams of free-to-air television
broadcast’ through the internet, including the
broadcasts transmitted by ITV. The justice
held in that case that TVC’s service falls
within the broad scope of communication
under Directive 2001/29, even if TVC used
a specific technical means different from the
original communication.
Another case was Stichting Brein v. Jack
Frederik Wullems (Filmspeler) vi . In that case,
Jack sold a device called the ‘filmspeler’
through his website and other online
distribution channels. Thus, when a customer
connects to the internet and turns on the
TV, the customer can stream the image or
audio from websites. Jack further installed
downloadable add-ons created by third
parties, and his website contained hyperlinks.
Via the hyperlinks, customers/subscribers
could watch a variety of live streaming content
without paying. Jack promoted his website via
the slogan ‘Never again pay for films, series,
sport, directly available without advertisements
and waning time. (no subscription fees, plug,
and play). Netflix is now past tense!’
The justice held that the device constituted
‘communication to the public’ because it
provides purchasers with immediate access to
unspecified copyrighted works on the internet
without the right holders’ consent. According
to the court, a new public is a public which
copyright holders did not take into account.
Thus, the device sold enlarges the pool of
users beyond that intended by the authors of
those copyrighted works.
In the United States, in American Broadcasting
Companies Inc. v. Aereo Inc, vii subscribers pay
a monthly fee to Aereo on Aereo’s website,
then, Aereo servers would select antennas to
catch the selected over-the-air broadcasts. The
broadcast would pass to Aereo’s transcoder,
which translated the broadcast signals into
digital format for the internet. Then, the data
would be saved in Aereo’s hard drive so that
a subscriber can access a specific folder on
multiple devices. Aereo believed its process
to be legal due to a Cartoon Network case,
where the court held that a form of streaming
was legal because the way the Cablevision
transmitted was not ‘to the public’.
When CBS, Comcast NBC, Disney, 21st
Century Fox, and other stakeholders sued
Aereo at the Federal court for copyright
infringement, the court held that Aereo’s
retransmission of a TV program by using
user-specific copies is just a ‘process’ for
transmitting performance. A large number of
paying subscribers lack a prior relationship
to the works, falling within the meaning of
‘public’. There was, however, a dissenting
opinion from Justice Antonin Scalia. He relied
on the traditional copyright infringement
theory. He predicted that the majority
decision would lead to an unpredictable
future since it adopted an improvised ‘looklike-cable
TV’ method and disrupted settled
jurisprudence on the volitional conduct
doctrine (a tort theory which requires
that a person must have committed an act
voluntarily to inure liability, as against passive
conduct). Secondary infringement may
thus robe in passive conduct, but not direct
infringement.
According to Justice Scalia, while in Video-
On-Demand (VOD) services like Netflix,
the company responds automatically to user
demand for videos on their system. Hence,
it is Netflix that choose the content. On the
other hand, in a Store- For-Copying or Copy-
Shop, the company does not provide content,
only copy machines. It is the customers
who choose the content, not the company.
Thus, in a Copy-Shop, the company may be
secondarily liable rather than directly liable
since there is no volitional conduct. Aereo’s
case applies to the copy-shop and since the
broadcasters sued for direct infringement,
there claim should fail. Unfortunately, the fine
reasoning of Justice Scalia’s position is only
but a minority opinion and not the decision of
the Supreme Court.
Six months later, another case came up – Fox
Broadcasting Co. DISH Network LLC viii .
In this case, Fox had several contracts
with various distributors. Fox entered
a retransmission agreement with other
multichannel video programming distributors
(MVPD) such as DISH, which retransmits
Fox’s programs to their subscribers. Later, Fox
sued DISH, alleging copyright infringement,
and breach of contract. The court held that
DISH did not engage in volitional conduct
to infringe because it was the subscribers
themselves that had created their online IDs,
downloaded the SlingPlayers, paid bills, and
most importantly, selected the programs that
were sent from the Set-Up-Boxes. None of
DISH’s employees actively responded to the
user’s request or intervened in the selection
process. DISH was, therefore, a licencee that
could not transfer title. DISH subscribers were
valid possessors of copyrighted work based
on the retransmission consent agreement
between Fox and DISH. Since DISH
subscribers were valid possessors, they could
transmit the programs rightfully to another
device for themselves or someone in their
households.
4. Evaluation and
Conclusion
When we follow the US court reasoning or
the EU court reasoning, we would naturally
come to the same end-point. The yardstick for
determining copyright infringement in online
streaming is whether consent is required,
whether there has been a public performance
or communication to the public, and whether
there has been a transmission irrespective of
what method was used in transmitting.
At an aggregation stage, it would appear to
many start-ups that consent is not an issue,
but this would very much play out in the
future when deciding whether there has been
an infringement or not. Whatever the business
model adopted, either by providing a platform
for subscribers to stream their content or
by building a platform with a mechanism
for customers to select content, violation of
‘public performance’ appears inevitable. Even
if a direct infringement is escaped there is a
secondary liability that may catch businesses
in the web of infringementix.
30 www.gipmatrix.com
The Nigerian situation is not much of a
difference. At first, consent of the copyright
owner is required except when the applicant/
user falls within the exceptions enumerated
under the first schedule of the Copyright
Act or any other exception(s) within the Act.
Nigerian law has slightly similar phrases with
the Internet Treaties and US and EU regime,
the argument that broadcast does not connote
online streaming would likely fail in our court
of law. The altitude of the Nigeria Court, no
doubt, will be to use traditional copyright
theory to determine liability either as a direct
or indirect infringement. ix
Hence in conclusion, how can an online
streaming business establish or succeed
without copyright infringement?
1. If the use is for commercial purposes
and copyright still exists in the work, go
with an intellectual property lawyer to
obtain consent and negotiate a favourable
deal with identified copyright owners.
2. To avoid chances of secondary liability,
get your intellectual property lawyer to
seek-out license from the NBC.
3. Retain the services of an intellectual
property lawyer; among other things,
this will help you understand and follow
the trend of the law and cases involving
copyright and online streaming (and other
connected aspects of IP law).
4. Establish a proper term of use. Do not
allow the website designer to copy and
paste any country’s/company’s terms of
use. Get an intellectual property lawyer to
do thorough work.
5. Develop a business model that will
ensure a win-win situation for all parties.
For example, copyright holders could
subscribe to your channel, and subscribers
can choose and stream their content
on your platform. That way, a win-win
is assured for the rights holders, the
platform provider, and the subscribers.
i https://www.pwc.com/ng/en/press-room/nigeria-will-be-the-worldsfastest-growing-e-m-market-pwc-
report.html
ii
https://www.prominence.global/how-consumers-spend-time-online/
iii https://www.go-gulf.com/online-time/
iv See Sarah Perez, JustWatch Debuts New Search Engine for Cord Cutters,
TECH CRUNCH (Feb. 5, 2015), https://techcrunch.com/2015/02/05/
justwatch-debuts-a-new-search-engine-for-cord-cutters/ (establishing that
“aggregation” is a type of streaming service that acts as a TV guide of all
streaming services); see also Nelson Granados, Only Top Video Streaming
Services Are Likely to Survive in the Trump Era, FORBES (Jan. 25, 2017,
10:48 AM), https://www.forbes.com/sites/nelsongranados/2017/01/ 25/
only-top-video-streaming- services-are-likely to-survive-in-the-trumpera/#5402e6dd3319
(explaining that another type of streaming service can
be in distribution); Sarah Perez, Sling TV Rolls Out a Better DVR With An
Option to Protect Recordings, Record From Fox, TECH CRUNCH (June
14, 2017), https://techcrunch.com/2017/06/14/sling-tv- rolls-out-a-betterdvr-with-anoption-to-protect-recordings-record-from-fox/
(implying that a
storage device is a type of online streaming service)
v See Sarah Perez, JustWatch Debuts New Search Engine for Cord Cutters,
TECH CRUNCH (Feb. 5, 2015), https://techcrunch.com/2015/02/05/
justwatch-debuts-a-new-search-engine-for-cord-cutters/ (establishing that
“aggregation” is a type of streaming service that acts as a TV guide of all
streaming services); see also Nelson Granados, Only Top Video Streaming
Services Are Likely to Survive in the Trump Era, FORBES (Jan. 25, 2017,
10:48 AM), https://www.forbes.com/sites/nelsongranados/2017/01/ 25/
only-top-video-streaming- services-are-likely to-survive-in-the-trumpera/#5402e6dd3319
(explaining that another type of streaming service can
be in distribution); Sarah Perez, Sling TV Rolls Out a Better DVR With An
Option to Protect Recordings, Record From Fox, TECH CRUNCH (June
14, 2017), https://techcrunch.com/2017/06/14/sling-tv- rolls-out-a-betterdvr-with-anoption-to-protect-recordings-record-from-fox/
(implying that a
storage device is a type of online streaming service)
vi 134 S. Ct. 2498 (2014).
vii 160 F. Supp. 3d 1139 (C.D. Cal. 2015).
ix https://digitalcommons.law.umaryland.edu/cgi/viewcontent.
cgi?article=1288&context=jbtl